Electricity Sector Reform in Sub-Saharan African Countries and the Required Measures for PPP in Geothermal Power Generation

Abstract

In recent years the electricity sectors in many developing countries have begun programs of major reform and restructuring that reflect the need for better service delivery from state-owned utilities. The reforms have dramatically improved the market structure, regulation and institutional framework. These reforms for many Sub-Saharan African (SSA) countries began in the early 1990s. Two decades later the procedures for reform have been established. However in many developing countries the path and outcome of the reforms vary considerably. The reform outcomes are dependent on the political, economical and market conditions of each specific country.

Geothermal experts in Africa agree that geothermal power generation in the region needs huge investments and strong commitment from both private and public sectors. Serious questions have been raised about the incentives that governments in SSA countries are able to offer to the investors especially in this time of global economic downturn.

This paper attempts to assess the most suitable reform model for the electricity sector in SSA countries, based on evidence obtained from already reformed countries in the region and across the globe - a reform model, which can create a financially strong sector with positive environmental polices that will attract the required investment for geothermal development. The reform models proposed in this paper concentrates on several scenarios for the generation function with special attention paid to the geothermal energy development, and how the geothermal power generation can leverage on the energy sector in the region.